Mastercard Sets Fraud Detection

Published: May 10, 1995

Mastercard International has teamed up with scientists at Los Alamos National Laboratory to develop a computer model for detecting credit card fraud, the company said yesterday.

The scientists will use advanced technologies that mimic the workings of the human brain to come up with ways of predicting whether a card is being used fraudulently. The computer systems learn to look for and flag patterns suggesting that a card is being used by someone other than the account holder.

Credit card companies keep tabs on where people use their cards and how much they usually charge. If the amounts and charge locations change drastically, that may be a sign that a card has been stolen.

Los Alamos scientists use the same techniques, known as neural networking, in nuclear weapons research and satellite technology.

Mastercard and its top issuing members have been using neural networks to detect fraud for years, but the Los Alamos systems will incorporate data that are not used in existing systems, like merchant locations and types of transactions.